NEW DELHI: After reaching out to the market regulator SEBI for clarification regarding a 2020 order, NDTV founders Radhika and Prannoy Roy have now said that the Adani Group-owned Vishvapradhan Commercial Private Limited (VCPL) requires approval from the Income Tax authorities for exercising their right to convert the warrants that would result in the acquisition of a 29% stake in the media outlet. This comes as NDTV promoters continue to delay Adani Group's hostile takeover.
"RRPRH, which owns 29.18% equity interests in NDTV, has intimated VCPL on August 31, 2022 that equity shares of NDTV held by RRPRH were provisionally attached by the Income Tax authorities in the year 2017, with notification in 2018 that the attachment shall remain in place until completion of reassessment proceedings," said NDTV in a regulatory filing late Wednesday.
RRPRH, the promoter holding vehicle, said that it has informed VCPL that operation of these order(s) of attachment will require approvals and/or clarifications from the Income Tax authorities in relation to the public announcement of August 23, 2022 by VCPL. RRPRH has invited VCPL to join them in their application before the Income Tax authorities.
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According to NDTV's regulatory filing, "The Income Tax Department attachment order of 2017 (read with order of 2018) pertains inter alia to the loan agreement with VCPL in 2009, and is premised on RRPRH (allegedly) transferring its controlling interest in NDTV to VCPL for Rs.403.85 crore, culminating in an estimate of Rs.175 crore “tax on capital gains arising on sale of controlling interest in NDTV to VCPL" on RRPRH.
"With the Securities Appellate Tribunal concluding, in its order of July 20, 2022 that the intent and language of the loan agreement and call option agreements read with the SAST Regulations makes it clear that there is no direct or indirect control of NDTV by VCPL. The transaction structure does not lead to a conclusion that VCPL has acquired direct or indirect control over NDTV, the Income Tax Authorities will be required to clarify whether in light of the SAT order, the provisional attachment will continue to operate on RRPRH equity shares held in NDTV," the regulatory filing read.
Further, RRPRH has intimated VCPL that as individuals, Radhika and Prannoy Roy, may individually require independent approval, under section 281 of the Income Tax Act, from the Income Tax Authorities, to deal with any assets, including indirect shareholding in NDTV, arising from sub judice (impugned) orders.
The Adani Group on August 23 announced it is indirectly acquiring a 29% stake in NDTV and had asked the holding firm -- RRPR -- to transfer by August 25 all its equity shares to VCPL.
VCPL, which was acquired by the Adanis for Rs 114 crore, owns warrants in RRPR and a conversion of warrants into equity will result in VCPL acquiring control of RRPR, which holds 29.18% stake in NDTV.
The Roys, however, have raised technicalities in the SEBI order of 2020 that for two years, until November 26, had barred NDTV's founder-promoters from dealing in their shares directly or indirectly.
The two parties on August 29 reached to SEBI for clarification on this.